As the economy sees downside, you may be tempted to cut back on your marketing budget to help with cost savings.
Although this might seem like a feasible option, cutting back on marketing during a downturn can actually yield more negative effects for your brand than positive ones. Here’s why you should keep marketing in an economic downturn.
Maintain Your Customer Base
As the market contracts, you might notice customers start to adjust their preferences towards brands. As brands lose customers during this period, you should focus on marketing strategies that can help retain and grow your current customer base. Audit your marketing strategy to see what trends perform the best and how you should leverage these trends to genuinely connect with your customers. It’s possible to increase brand loyalty during a market downturn if you go the extra mile for your customer base by providing quality content that resonates with them.
Less Competition in Advertisement
As many of your competitors cut back in advertising, you’ll notice that it’s easier for your content to reach a wider audience. Less competition in advertisement means more room for your content to perform. Take advantage of economic downturns by leveraging relevant content to help sustain your brand. Consider your long-term vision when determining what content to promote. You can choose to promote short term incentives that would benefit the customer through cost savings if that's appropriate for your brand, but you should always keep your long-term vision in mind when marketing during an economic downturn. Pay attention to what your competitors are doing so your brand never misses an opportunity.
Increase Market Share
There’s been many famous brands that were able to increase their market share during economic downturn by increasing their marketing budget. As competitors cut back, ramping up your marketing efforts will help increase brand awareness and attract new customers. Toyota is famously known for keeping their marketing budget consistent during the downturn of the 1970’s, leading their brand to surpass Volkswagen in being the #1 top imported carmaker in the United States. Today, Toyota produces the top two best-selling vehicles worldwide, the Toyota Rav4 and Toyota Corolla. Toyota’s story could have been written differently if they had chosen to decrease their marketing budget during the economic downturn of the 70’s.
Ad Spend Becomes More Reasonable
As many companies cut back on marketing efforts during economic downturn, this can be a chance for brands to take advantage of cheaper ad spend since there is less competition. Keeping your ad spend the same during economic downturn or slightly increasing it can help you to grab more market share and increase your growth in the long term. Don’t focus on drastically changing your marketing strategy during a down market, instead, reevaluate consumer behaviors and adapt your strategy to fit. Consumers tend to spend more time on the research stage of the buyer’s journey in times of economic slowdown, meaning your brand should focus on search engine marketing to reach prospects in the research stage
Position Brand for Growth
When you keep marketing in an economic downturn, you should take action early on and position your brand for growth when the market decides to turn around. Brands that fail to leverage the market downturn in their marketing strategy will lose their market share and experience a harder time recovering. When you strategize your marketing around the economic downturn, you will guarantee better long-term gains for your business. Take Amazon for example, they reported increasing profits by 68% in 2009. After the recession of 2008, Amazon never cut back on marketing and took this opportunity to market their new product at the time, The Kindle. Marketing efforts certainly paid off as Amazon saw a drastic increase in both revenue and sales.
Establish Brand Trust
During hard times in the market, it's likely that consumers no longer have as much free cash flow as they once did. As a brand, this is your chance to develop trust with your customers by producing educational and emotional content that can build brand trust. Leverage content marketing on social media to educate your customer base about your products and how to use them. When consumers have less cash flow, they will take more time to research their purchasing decisions. Answer your customer’s questions directly and educate them on relevant topics to help build brand trust. Emotions can be high during economic downturn, as a brand you should focus on providing high quality content that educates and gives back to your customers.
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